Monthly Archives: May 2015

In the last post How and When to adjust the Oscillators such as RSI or Stochastics with market momentum, we adjusted our Oscillator settings at this point in the circle after market rhythm changed. Working with new adjusted settings of 34,13, 20, 5 we would have captured the upmove around 8315 and got exited at 8340 a profit of 25 points with very low risk of 10 points as the stop was at 8305 a bit below the first swing low so that we don’t get stopped out at fake break out.

While, we were entering in this position we might not be aware of Risk: Reward Ratio (if would have been using Elliott wave or Fibonacci we would have known our targets in advance and hence Risk Reward) still we knew one thing how much money could we loose in this trade and that is sufficient to consider if we will enter in the trade or not? Knowing the Stop in advance is a very essential part of trading because knowing this helps us to plan better and do proper money management, so that our capital is preserved, which will help us to trade in many other profitable setups and if you don’t put and decide the stop in advance and remain in a losing position you will be kicked out by market, so the option is within you, weather to get out with the stop hit voluntarily or the market will kick you out brutally.

There is a difference in you getting out yourself than the market kicking you out. When we come out voluntarily we have sufficient capital to again earn profits because opportunities are always there in one stock or the other, but when you fight with the market and keep on holding a losing trade it spoils your capital which could have been otherwise used to reenter into 100s of other new trades and would have helped you gain experience in the market and not letting you say bye bye to markets forever.

The trade that started at 2 pm and you would have kept revising your stops at every Reversal in the oscillator and would have stopped out either at a Fibonacci target or got out voluntarily since, a 1 minute trader should never carry his position next day.

Now lets see the second Chart. You can see that Oscillator overbought at 10 am did not matched the actual top, here is when you should open another chart and start adjusting the settings so that they can correlate with actual tops and bottoms as well as reach the Oversold and Overbought zones properly.

Next top at 11 am correlated exactly with the oscillator reversal but did not read overbought zone, which can create a doubt in taking a position. Which, is why in order to not miss out on such chances one needs to adjust the settings. I am talking a 1 minute example, so it has to be done quickly and shows that one is a day trader, his trading is his living and if he delays to adjust oscillator he will miss out moves or get in wrong moves.

The top at 12 noon again not catch-able as the oscillator did not reached the overbought zone properly, adjusting the setting is the key. Now, if these were say 15 minutes or higher time frame charts you could have taken your time.

In the third and last chart you will note that settings have been changed to 73, 8, 8, 4. You need to play around it and you will be able to do it, if you aren’t write me a mail at ruchirgupta2000@gmail.com.

There are few points to be remembered for these settings:

1. You would have noticed that once you change the setting it is works for 3-4 moves in future, this could be a great insight on starting to realize that may be the oscillator setting is due and I should look for change in market Rhythm.
2. Remember the old settings, when ever market changes the rhythm first apply the old settings that have successfully pointed tops and bottoms. If they don’t work this time then only use the new setting.
3. Every stock, commodity, currency has its own temperament or rhythm. The setting that is working on Nifty may not work on BankNifty and visa versa.

We, have been given certain default settings and we never bothered to alter these. The change in the settings is one of the keys to identify the trends.

Elliott wave Analysis of Nifty: From last hourly chart Nifty Elliott Wave and Fibonacci Analysis 25 May 2015, I shared on Tuesday, in 2 days now, we have seen the B wave unfolding on the downside, though it did not took support on highly sought support of 8240 but reversed from 8270. But some thing that we already knew was that 8240 was likely when the trend was to fall in that flow, however as B wave had to further subdivide in to 3 waves the momentum trendline, I had drawn on the previous chart did not continued as the B subdivided into 3 waves, now it is high likelihood that we are done with the B wave on downside because of the following reasons:

1. Nifty took support on blue channel lower trendline.
2. The downfall was slower in terms of momentum compared to 5-7 May fall and 12 may fall.
3. Visual Squaring of time and price from 5-7 May fall was applied to recent fall of 22-28 may. This concept is derived from Gann’s work and I have mixed my trick and made it visually applicable without any trendline or scale measurement.

Now, going forward we should project the C waves into the future. Confirmation will be received once we break the b of B wave at 8368. In my view, Nifty must reach atleast till odd color channel, 8546 to 8640, many fib Ratios lie here, 62% of the A of (B) will land here, while A of (B) = C of (B) will lie in upper channel. Both the possibilities are alive nifty has shown the signs of reversal. Lets see how new waves unfold, I still in a view of C on upside is left then only the downside 1100 points will get balanced correction, we are still left with few hours to complete the 38% time retracement that was discussed last time.

Elliott Wave analysis on Nifty

Caution, the break of the down-line of blue channel will mean nifty touching the red channel down-line. All these views are just for educational purposes, with no intention to recommend any thing. To learn in detail please mail me at Ruchirgupta2000@gmail.com

Mercury Retrograde period 19 May – 11 June 2015- Why you should not trade in the times of Mercury retrogrades?
Mercury retrogrades have been famous for their uncertainty, even the best of the best traders struggle to trade this period. If you are trading in this period high chances are targets will be reached but first they will hit your stops or may be the prices will reverse few points before your target gets achieved. The profits that were earned previously were given away. This period is not good for any kind of financial decision making. If someone still wants to trade in this period he/she should trade with very light position. Its like a Storm, a powerful wind the trees who are too stubborn and high with egos tend to fall in this wind. Trade safe.

How and When to adjust the Oscillators such as RSI or Stochastics with market momentum

Those who use Oscillators(RSI or Stochastics) for trading may be with Candlesticks or any other Technical Analysis Methods (I use it with Elliott Waves, Fibonacci levels and WD Gann Methodsfor higher confidence) may like to know that Oscillator such as RSI, Stochastics or MACD settings must be changed with the change in market trends. For example when markets are going for a sideways correction the Oscillator settings must be different versus when they are trending

Apart from Positive or Negative DivergenceOscillator settings could play a vital role in telling many other relevant facts to note which we may miss out other wise. Here are few of them.

1) The area in the rectangle, every Oversold and Overbought zone correspond to reversal, that is because market was following that rhythm. Everything seemed coherent. Majority of traders use oscillators in this way.

2) when the out of rectangle situation occurs, they either give all the gains in one single move trying to catch every top or bottom. In the circle every time bearish candles occurred a trader will try to short and get stopped out. While, this situation tells us that there is a change in the rhythm or momentum in market and now the oscillator settings are again to be changed. or better move to higher time frame to get better clarity or if the rhythm is coherent, trade in that time frame.

Now the check the oscillator settings in the second chart, I have readjusted with this new rhythm. It should do well now. Also read my earlier post on How To Revise Stop when already in Profit. Both the techniques of Oscillator adjustment and revising the profits support each other, as you will find in that article that adjust your Stop once there is a bullish or bearish reversal. Now Bullish or Bearish Reversal could be identified only when the oscillators are adjusted properly so that the action of Stop adjustment is taken on the right time, no sooner no later.

Elliott Wave and Fibonacci Analysis of Nifty- as Discussed in the earlier update on Nifty Elliott Wave and Fibonacci analysis,the abc on the downside till 8000 was a 3 wave abc subdivision (to read the Previous Report, click here). Which was making a case for a Flat or a Triangle, and suggesting the upmove till 8680 in 3 waves, the present upmove till 8490 which we have seen till now could only be the wave ‘a’ of the larger (B)wave on the upside. Now, it seems that wave A is over on the upside, wave B in 3 waves must unfold on the downside, which can get supports at 8240 and 8185 areas. After, which a final C wave must follow completing the (B) wave.

As per the structure unfolding till now, possibility of a Flat or Triangle are open, (low of 8000 must hold for that), and if it holds and we reverse from the above mentioned fib support zones we may reach the completion of (B) wave discussed above (which has high likelihood of reaching 8680).

Now, Lets try to assess the ending of the Wave B on the downside, which is in action. More levels may unfold if these are broken and entire wave count might have to be changed in the low of 8000 is broken and get it adjusted to a leading diagonal pattern. But for right now we must assess the levels for the wave B.

Nifty Support Levels: What is making the 8240-45 as the immediate support? What is making the 8240-45 as the immediate support?
– Fibonacci levels are overlapping on each other.
– Many other levels also lie there, which are not being displayed.
– Channel is also coming to support that level.
– The angle of the decline in also very favorable to reach this level.

Nifty may stop here, if not then, next level of 8185, will again give strong support coz of the reasons mentioned for 8240-45 level.

Nifty Time Analysis: The full abc correction on the downside from 9100 till 8000 took 39 trading days and this must be countered by the upside move for atleast 38% of the time. Ideal time would be 50% to 62%. The upside so far has not met the ideal minimum requirement of 38%, which also suggests more upside or after this wave B on the downside in over.

“These are just my personal views based on Elliott waves and Fibonacci Price and Time levels and the purpose in purely educational”

What to expect in Nifty in coming Weeks/ months. So far till 8000 we have seen a ABC pattern and we know that it’s the wave 4 which is going on. It is also known that the wave 4s are complex, sideways, not as sharp as we have seen, which makes a case of 2 scenarios:
1) the ABC wave decline is a Wave ‘a’ of larger degree and is over (from 9100 to 8000) and the ‘b’ wave of the Flat is going on, which should be again 3 waves, this up move could be 62% to 138% of the 1100 points fall. After this we may see the final C wave, a 5 wave decline.
Since, in a flat wave must be atleast 62% of Wave ‘a’ ,Nifty must atleast reach till 62%, which is 8680. The Present upmove which has started seems to be the A of b wave on upside, It is very weak, as is correction to the correction. You can see in the channel, prices are not able to cross the middle line.
2) Complex corrections in wave 4s could be very easily be Triangles and that scene is also open and that still requires 62% retracement of the upside.
So both the cases may taking us towards 62% retracements.
3) There is also a possibility of double and triple threes in wave 4. Which may imply we may face complex correction for months.

Please refer both the charts. Hourly as well as Daily and take your own decisions.

“This is just a personal view and neither a recommendation nor a tip nor an advice for any trade.”

State Bank of India may test the these fibonacci levels in the near future. This is just my view and a recommendation or a tip. No Elliott Waves analysis has been used in it. Fibonacci in itself is a very strong tool, these fibonacci levels are different from what we use for particular waves to waves for future projection.

This update on Tata Steel is in continuation to the previous 2 updates. I have analysed the multiple time charts with Elliott waves principle and tried to explain what to expect in future.

Hourly Chart: If this was C wave, and correction was to end with this (read previous post) , this volume spike which is even bigger than any of the the impulse waves should not have happened. The Volumes at ending c wave corrections become low and not increase like it happened here. Refer to next 2 higher time frame charts with this post.

Weekly Chart: The Large decline on a larger time frame tempted to assess what was happening here. The Upmove clearly shows 3 subdivisions. 3 waves up suggesting, that present downside may not be over. Which forces to analyse even a longer time frame chart.

Monthly Chart: On Larger time frame I found Triangle in action. Its E wave on the down side is going on. This the picture much clear, on the larger time frame this is a 4th wave correction in form of triangle from 2007 to present and since its in the last phase of correction E wave it must start moving up. also C wave = 62% of A, and D wave = 62% of B. Ideally, E wave must be 62% of C which may bring it to 248 levels in coming 5 – 9 months. To me it seems a time to accumulate at every 20-25 Rs fall for long term investors. Again, its just my view. I felt to update this as a responsibility to bring the larger picture coz in earlier post it seemed a set up for going long is getting ready, it may or may not go up but coz of the risk and reward comparison, I will stay away from it as I am a swing trader.

“This is just a personal view and neither a recommendation nor a tip nor an advice for any trade”

Tata Steel Elliott Waves Analysis Update: After writing the review yesterday on Tata Steel, Wave C actually Started subdividing, it formed the Wave 1 of C with the upmove and now its opened gap down. It has clearly broken the first support level of 50% and reached 62%. Here the support is at 343-338 area (ideally prices should not god below this area), which is holding, yet we should ideally see the 5th wave on the downside (sometimes the C waves are only 3 waves), still since the 62% retracement is over and time wise we have reached 50% of the full Impulsive move.
If prices don’t retrace further then we will have 2 scenarios, both of them suggesting upmove:
As already said in the wave 2 the corrections are shorter in duration than wave 4 and structures are sharper than 4. This is general observation. Which means we should start seeing an upmove in the form of wave 3 once the correction ends.
Second, scene is that this completed abc (though 5th wave still may be remaining), is just the wave a of the entire correction, if that’s the case we may still go up as a wave B.
So, both cases suggesting the case of upmove. (we may be able to gauge the if its B wave or 3 wave with the strength of the move). I, must tell you that even though both cases may be suggesting the upmove, I don’t take my entry just based on this, I have a proper system from entering till exiting, which is very lengthy to explain here.

“This is just a personal view and neither a recommendation nor a tip nor an advice for any trade”

To learn Elliott waves, Fibonacci and Gann in detail please contact and message me in Inbox. My Email address is Ruchirgupta2000@gmail.com. Please like and follow my page and also share my post , made it for teaching Elliott wave and Gann.https://www.facebook.com/pages/Learn-Elliott-Waves-Gann/299034886964403 You can get many updates such as this on my page.

Elliott Waves Analysis of Tata Steel: The upmove was a 9 wave in which 5th wave subdivided in sub waves. Wave 1 on the upside is complete and we in a wave 2 correction. A and B of the ABC are over while C is going on. Since A and B were subdivided in 3 waves each which suggests the formation of a flat (3-3-5). So, the C wave ideally be subdivided into 5 waves, though I have not seen any subdivision, which could mean C wave completion without any subdivision. First support, I see at 347 which is at 50% internal and 127% external retracement.
While the possibility of correction to reach 62% is still open, the correction in waves are majority steep decline and short term, so the complex correction though possibility is open, probability is low.
To learn Elliott waves, Fibonacci and Gann in detail please contact and message me in Inbox. My Email address is Ruchirgupta2000@gmail.com. Please like and follow my page and also share my post , made it for teaching Elliott wave and Gann.https://www.facebook.com/pages/Learn-Elliott-Waves-Gann/299034886964403 You can get many updates such as this on my page. “This is just a personal view and neither a recommendation nor a tip nor an advice for any trade”